COMMITMENTS AND CONTINGENCIES	9 Months Ended
Jul. 31, 2020
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	10. COMMITMENTS AND CONTINGENCIES Corn Purchases - Members GFE purchased corn from board members of approximately $1,482,000 and $2,366,000 for the three months ended July 31, 2020 and 2019, respectively, and approximately $2,323,000 and $4,319,000 for the nine months ended July 31, 2020 and 2019, respectively. HLBE purchased corn from board members of approximately $57,000 and $2,633,000 for the three months ended July 31, 2020 and 2019, respectively, and approximately $5,872,000 and $7,219,000 for the nine months ended July 31, 2020 and 2019, respectively. Corn Forward Contracts At July 31, 2020, GFE had cash and basis contracts for forward corn purchase commitments for approximately 3,085,000 bushels for deliveries through December 2022. Given the uncertainty of future ethanol and corn prices, GFE could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts and its inventories using the lower of cost or net realizable value evaluation, similar to the method used on its inventory, and has determined that, with respect to GFE, an impairment loss of $207,000 existed at July 31, 2020, and no impairment loss existed at October 31, 2019. At July 31, 2020, HLBE had cash and basis contracts for forward corn purchase commitments for approximately 4,613,000 bushels for deliveries through March 2021. Given the uncertainty of future ethanol and corn prices, HLBE could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts and its inventories using the lower of cost or net realizable value evaluation, similar to the method used on its inventory, and has determined that, with respect to HLBE, an impairment loss of $824,000 existed at July 31, 2020, and no impairment loss existed at October 31, 2019. Ethanol Forward Contracts At July 31, 2020, GFE had fixed and basis contracts to sell approximately $10,800,000 of ethanol for various delivery periods through September 2020, which approximates 97% of its anticipated ethanol sales for that period. At July 31, 2020, HLBE had forward contracts to sell approximately $6,069,000 of ethanol for various periods through September 2020, which approximates 48% of its anticipated ethanol sales for that period. Distillers' Grain Forward Contracts At July 31, 2020, GFE had forward contracts to sell approximately $1,608,000 of distillers’ grain for deliveries through September 2020. At July 31, 2020, HLBE had forward contracts to sell approximately $325,000 of distillers’ grains for delivery through December 2020. Corn Oil Forward Contracts At July 31, 2020, GFE had forward contracts to sell approximately $504,000 of corn oil for delivery through September 2020. At July 31, 2020, HLBE had forward contracts to sell approximately $701,000 of corn oil for delivery through September 2020. Rail Car Rehabilitation Costs GFE leases 75 hopper rail cars under a multi-year agreement which ends in December 2026. Under the agreement, GFE is required to pay to rehabilitate each car for “damage” that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease. Prior to the year ending October 31, 2019, GFE believed ongoing repairs resulted in an insignificant future rehabilitation expense. During the year ending October 31, 2019, based on new information, we re-evaluated our assumptions and believe that it is probable that we may be assessed for damages incurred. At July 31, 2020 and October 31, 2019 GFE has recorded an estimated liability totaling $825,000. GFE accrues the estimated cost of railcar damages over the term of the lease as the cost of damages are incurred. HLBE leases 50 hopper rail cars under a multi-year agreement which ends in May 2027. Under the agreement, HLBE is required to pay to rehabilitate each car for “damage” that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease. Prior to the year ending October 31, 2019, the Company believed ongoing repairs resulted in an insignificant future rehabilitation expense. During the year ending October 31, 2019, based on new information, we re-evaluated our assumptions and believe that it is probable that we may be assessed for damages incurred. Company management has estimated total costs to rehabilitate the cars at July 31, 2020 and October 31, 2019 to be approximately $585,000 and $551,000, respectively. During the three and nine months ended July 31, 2020, the Company has recorded an expense in cost of goods of approximately $16,000 and $70,000, respectively.

10. COMMITMENTS AND CONTINGENCIES

Corn Purchases - Members

GFE purchased corn from board members of approximately $1,482,000 and $2,366,000 for the three months ended July 31, 2020 and 2019, respectively, and approximately $2,323,000 and $4,319,000 for the nine months ended July 31, 2020 and 2019, respectively.

HLBE purchased corn from board members of approximately $57,000 and $2,633,000 for the three months ended July 31, 2020 and 2019, respectively, and approximately $5,872,000 and $7,219,000 for the nine months ended July 31, 2020 and 2019, respectively.

Corn Forward Contracts

At July 31, 2020, GFE had cash and basis contracts for forward corn purchase commitments for approximately 3,085,000 bushels for deliveries through December 2022.

Given the uncertainty of future ethanol and corn prices, GFE could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts and its inventories using the lower of cost or net realizable value evaluation, similar to the method used on its inventory, and has determined that, with respect to GFE, an impairment loss of $207,000 existed at July 31, 2020, and no impairment loss existed at October 31, 2019.

At July 31, 2020, HLBE had cash and basis contracts for forward corn purchase commitments for approximately 4,613,000 bushels for deliveries through March 2021.

Given the uncertainty of future ethanol and corn prices, HLBE could incur a loss on the outstanding corn purchase contracts in future periods. Management has evaluated these forward contracts and its inventories using the lower of cost or net realizable value evaluation, similar to the method used on its inventory, and has determined that, with respect to HLBE, an impairment loss of $824,000 existed at July 31, 2020, and no impairment loss existed at October 31, 2019.

Ethanol Forward Contracts

At July 31, 2020, GFE had fixed and basis contracts to sell approximately $10,800,000 of ethanol for various delivery periods through September 2020, which approximates 97% of its anticipated ethanol sales for that period.

At July 31, 2020, HLBE had forward contracts to sell approximately $6,069,000 of ethanol for various periods through September 2020, which approximates 48% of its anticipated ethanol sales for that period.

Distillers' Grain Forward Contracts

At July 31, 2020, GFE had forward contracts to sell approximately $1,608,000 of distillers’ grain for deliveries through September 2020.

At July 31, 2020, HLBE had forward contracts to sell approximately $325,000 of distillers’ grains for delivery through December 2020.

Corn Oil Forward Contracts

At July 31, 2020, GFE had forward contracts to sell approximately $504,000 of corn oil for delivery through September 2020.

At July 31, 2020, HLBE had forward contracts to sell approximately $701,000 of corn oil for delivery through September 2020.

Rail Car Rehabilitation Costs

GFE leases 75 hopper rail cars under a multi-year agreement which ends in December 2026. Under the agreement, GFE is required to pay to rehabilitate each car for “damage” that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease. Prior to the year ending October 31, 2019, GFE believed ongoing repairs resulted in an insignificant future rehabilitation expense. During the year ending October 31, 2019, based on new information, we re-evaluated our assumptions and believe that it is probable that we may be assessed for damages incurred. At July 31, 2020 and October 31, 2019 GFE has recorded an estimated liability totaling $825,000. GFE accrues the estimated cost of railcar damages over the term of the lease as the cost of damages are incurred.

HLBE leases 50 hopper rail cars under a multi-year agreement which ends in May 2027. Under the agreement, HLBE is required to pay to rehabilitate each car for “damage” that is considered to be other than normal wear and tear upon turn in of the car(s) at the termination of the lease. Prior to the year ending October 31, 2019, the Company believed ongoing repairs resulted in an insignificant future rehabilitation expense. During the year ending October 31, 2019, based on new information, we re-evaluated our assumptions and believe that it is probable that we may be assessed for damages incurred. Company management has estimated total costs to rehabilitate the cars at July 31, 2020 and October 31, 2019 to be approximately $585,000 and $551,000, respectively. During the three and nine months ended July 31, 2020, the Company has recorded an expense in cost of goods of approximately $16,000 and $70,000, respectively.